Bridgestone/Firestone cuts output

JasonMargolis

NASHVILLE, Tenn. (CBS.MW) -- Just when it looked like things couldn't get any worse, the problems for Bridgestone/Firestone continue to mount.

The tire company, already in the hot seat for its widely publicized massive tire recall, announced Friday that it will reduce production in three of its plants and temporarily lay off some 2,000 of its workers.

Both the LaVergne, Tenn., and Oklahoma City, Okla., plants will reduce tire production effective Jan. 2001. The company cites oversupply of passenger radial, light truck radial tires and truck and bus radial tires for the impending slowdown.

The move will result in the temporarily layoff of roughly 700 workers in Oklahoma City and 400 employees in LaVergne.

Further, the company will curtail production for two weeks in January at its Warren County, Tenn., plant affecting approximately 900 employees.

Last month, the company also said it would hold back production in December and lay off roughly 450 workers for an indefinite period at the Decatur, Ill., plant.

CEO John T. Lampe said in a statement, "While no one ever likes to announce layoffs and production reductions, it is necessary to do so in order to ensure the financial strength and viability of this company."

Employees affected by the moves will receive up to 80 percent of their wages during the downtime, according to a company statement.

Bridgestone/Firestone, which is a subsidiary of Bridgestone Corp
BRDCY, -0.87%
said that the oversupply problems are due to the tire recall, a general slowdown in the tire industry, and a large inventory buildup in expectation of a worker strike that never materialized.

Shares of Bridgestone closed up $8 to $113 on Friday. The shares had hit a 52-week-high of $271.45.

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